Administrative Services Only (ASO)

Definition - What does Administrative Services Only (ASO) mean?

Administrative Services Only (ASO) is a program set up by employers for the benefit of their employees where the former finances a benefit plan, such as health coverage or retirement benefits, of the latter. The employer pays for the claims rather than relying on a third party, such as an insurance company.

Insuranceopedia explains Administrative Services Only (ASO)

While an ASO plan is funded by an employer, a third party might be tasked with overseeing and administrating insurance transactions, such as processing claims. Paying for the claims, however, is still the employer's responsibility.

Employers who use an Administrative Services Only system also buy stop-loss insurance so that another insurer pays the claims if they exceed the maximum amount the employer has set for their employees.